No 'smoking gun' in Effingham audit

Thursday

"Where's the smoking gun?" Jack Garvin asked commissioners when they were presented with the audit findings at their June 18 meeting. "We let two people go. And I thought they stole."

Garvin, chairman of the Effingham County Democrats and a resident of Clyo, referred to the forced resignations of David Crawley, who was county administrator, and his wife, Patrice Crawley, who was county clerk, on May 21.

Garvin was the only member of the public to comment about the audit.

Commissioner Vera Jones told Garvin that the smoking gun is between pages 111 and 141 of the audit, the pages that list 38 concerns about how things are handled in the county.

"I don't know that somebody stole," Jones said. "I'm not so sure about that comment. But those are where the findings are."

Jones has said the worst thing the audit found was problems with how funds for Keep Effingham Beautiful were handled. A separate, in-depth audit will be done on that topic.

Auditor Donald Caines of Rincon said a corrective action plan must be submitted when the report is given to the Georgia Department of Audits, outlining what is going to be done about each concern, when it will be done and who will do it.

Caines said he considers 23 of the 38 findings to be "material," or significant weaknesses. "A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis," Caines wrote in the report.

The auditor will check next year to see if the changes have been implemented. If the problem has been corrected, the finding goes away, he said.

Caines has done Effingham County's audits since at least 2000-2001, according to Finance Director Joanna Wright.

Wright said Caines has been paid about $50,000 each year to do the audit: 2007, $48,000; 2008, $51,000; 2009, $54,000; 2010, $49,000; 2011, $49,000; and 2012, $46,000.

The report presented on June 18, for the year ended June 30, 2012, did not include any of the replies by David Crawley, who quit before the audit was finalized. He argued that some of the 38 findings were incorrect and should not have been left in the final report.

Commission Chairman Wendall Kessler said the report concludes that "the county is in good financial shape," except for its water and sewer debt.

"Financially, especially the governmental funds are in strong financial condition," Caines said. "The proprietary funds (water and sewer) are in weak condition."

The county is in its ninth year of developing water and sewer operations. The system lost $2.6 million in 2012, compared with $1.6 million in 2011.

Wright said there's a plan to deal with the water and sewer debt.

"The shift when we made those moves within service delivery were such that we believe that we can at least handle that debt for the next three to five years," Wright said. There may need to be some intervention, but "We are looking at that and we are shifting as much as we can to ensure that debt is secure."

Jones said, "There's money there from the service delivery that we set up, special tax district to cover that for at least a couple of years, and hopefully during that time we can continue to build users.

"I would concur with the fact that you know financially we are in good shape," she said.

The audit says the county's assets exceeded its liabilities by $104.9 million. Of that, unrestricted net assets available to maintain the county's continuing obligation to citizens and creditors are $9.2 million.

"Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the county as a whole is improving or deteriorating," Wright said in the audit.

Net assets declined from $107.4 million in 2011 to $104.9 million in 2012.

Public safety takes up 48 percent of the county's expenses, down from 50 percent in 2011, and public works takes up 21 percent of the expenses, up from 17 percent in 2011.

Property taxes decreased $855,300 during the period covered by the audit, or 5.2 percent.

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